With this acquisition, ADP becomes the only human capital management provider with a proprietary digital payments processing platform.
ADP has been helping organizations build better workforces for more than 65 years, the foundation of which is ensuring that employees are paid seamlessly and conveniently. Today, ADP is strengthening and expanding its employee payroll offer by acquiring Global Cash Card, a leader in digital payments, including paycards and other electronic accounts. We are excited to welcome our new Global Cash Card colleagues to the ADP family!
The digital payment space is an exciting one for the future of payroll. Paycards are the fastest growing method of payment in recent years, with the estimated value of Form 1099 transactions now ranging between $700 billion and $1.1 trillion. The gig economy has also driven the demand for these accounts, which can let independent contractors bring their various wages and expenses into a single account, providing the best picture of their financial well-being.
From the employer's perspective, digital payments can be a less expensive, more immediate, and more secure option than paper checks. And there is room for growth, as 73 percent of companies currently use mostly manual tools to manage their Form 1099 talent. Digital accounts, such as paycards, are also attractive for the 24.5 million U.S. households considered still "underbanked" (2015 figures). And, the functionality of digital accounts, including paycards, and ease of access to funds have made them particularly popular among Millennials and Gen Z.
With this acquisition, ADP becomes the only human capital management provider with a proprietary digital payments processing platform. The company will offer digital accounts and flexible payment offerings across its existing base of more than 700,000 clients, while increasing the speed of implementation for new clients. Once integration is complete, it also means that ADP will manage more than 4 million accounts on a single, industry-leading platform.
For more information about the acquisition, check out the full announcement.